EUR/USD Forecast: the 200-week SMA offers strong resistance. Still looking for stronger catalysts
|- The pair keeps consolidating gains above 1.1300 the figure.
- Markets look calmer in the wake of Brexit vote and despite renewed concerns arising on the trade and geopolitical fronts.
- The critical 200-week SMA emerges as the next significant hurdle.
EUR/USD continues its march north so far this week and is now looking to consolidate the recent breakout of the critical 1.1300 barrier. The upside momentum, however, seems to have met tough resistance in the 1.1330/40 band for the time being, where emerges the critical 200-week SMA.
Spot has managed to keep the composure in the upper end of the weekly range despite ups & downs in volatility, all in response to the equally changing mood in the risk-associated complex following this week’s key Brexit votes. In this regard, the performance of EUR/GBP should prove to be key in the pair’s price action in the weeks to come, as EU-UK negotiations are expected to intensify following yesterday’s vote on an extension of Article 50.
In addition, concerns over the US-China trade dispute have resurfaced, although market participants appear to have the issue somehow priced in already. The now postponed meeting between President Trump and China’s Xi Jinping is expected at some point during next month.
In the very near term, final CPI figures in Euroland are unlikely to be a market mover today, while the pair should pay more attention to releases in the US docket, where Industrial Production, the NY Empire State index and advanced Consumer Sentiment will be in centre stage.
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